On Monday, the Supreme Court ruled against General motors over the ignition switch issue. That will likely have a negative impact on the stock for quite some time. In other negative news, the company announced that it had to shut down a plant in Venezuela. The good news is that General Motors made it out on top in March with the best automotive sales in its industry.

Supreme Court Ruling

The Supreme court turned away an appeal by General motors on Monday, to block a lot of lawsuits that it is facing. The reason for the lawsuits deal with the company’s faulty ignition switches found on many of the older model vehicles. The ruling stated that the 2009 bankruptcy of the company did not shield it from the liabilities for all the cases against it.

The Supreme Court upheld the ruling from the federal appeals court last year. The appeals court ruled that General Motors remained at fault for the faulty ignition switches. It stated that the company is still liable for all the deaths and injuries it caused, because it knew about the problem for decades and did nothing about it.

As a result of the faulty switch there were 124 deaths and 275 injuries. How does this ruling affect General Motor’s stock? The main issues is that there are slated to be an additional 1,000 or more lawsuits against the company.

The problem with that is that General Motors would be liable to pay between $5 to $10 billion in liabilities. In any capacity, the company losing billions of dollars does not bode well for its stock. It will be a huge overhang until all cases have been completely tried or settled.

Plant Shut Down

General Motors continues to face problems across the globe with other issues. Another issue announced on Monday is that it had to fire 2,700 workers because of a plant shut down. The reason for shutting down the plant was due to a seizure from the Venezuelan court.

The court ruled that there were two dealers that filed a lawsuit against General Motors. They stated that they had not received the agreed upon sale of up to 10,000 vehicles. It’s not as if the plant was producing much anyways. Workers revealed that before the plant seizure, General Motors was dismantling the plant.

That is because there was no car produced there since 2016. The truth was that General Motors struggled to keep its plant afloat in Venezuela. There were two big reasons why it had a hard time.

The first of which was that there was always a shortage of parts. Without the proper parts the plant could not assemble vehicles in a timely fashion. Also, issues with the nation’s currency was another major obstacle to overcome.

Improved Sales

General Motors is facing many issues, but there is a positive piece of news that it has achieved. That is the fact that General motors had seen its U.S. car sales grow by 1.6% in March. That amounted to a total of 256,244 vehicles being sold. The key point is that General Motors outpaced all the other automakers in the industry for the month of March.

What Binary Options Traders Should Watch For

There are a few things that traders should watch for. The first of which is how the Supreme Court ruling will play out. The question is not if, but how much will General Motors have to eventually pay in damages. It may end up that not all the lawsuits go through, but even if half do the company will still be liable to pay up.

The second item would be the plant shutdown. The closing of a plant is never a good thing. Even if the plant was not performing well, it still allowed the company to keep a presence in that country. What remains to be seen is if General Motors is forced to shut down any other plant that is underperforming.